KARACHI: Sharing of resources for Towns worked out
KARACHI, Jan 17: A six-member committee on resource-sharing among city district government, towns and union councils of Karachi has devised a provisional formula for sharing the divisible pool (matching grant in lieu of octroi) between different tiers of local government in Karachi.
The committee has observed in its report submitted to the government that the functions of the defunct KMC and DMC as well as City District Government Karachi and Town Municipal Administration were more or less similar.
The annual expenditure of about Rs766.033 million incurred on medical and education activities by the defunct DMCs (now with the CDGK) would thus be included in the share of the CDGK whereas the expenditure on anti-encroachment (approximately Rs24.76 million) would be included in the share of TMAs.
Based on the actual receipts of KMC in lieu of octroi in the past two years, the expenditure on education, medical and anti-encroachment comes to 19.007 per cent and 0.007 per cent, respectively.
After adding to earlier shares of KMC and DMCs — 33 per cent + 19.007 per cent - 0.007 per cent =52% and 67% - 19.007% = 48 per cent — these become the respective shares of the CDGK and TMAs.
Since the union octroi income has not been specifically assigned to any tier of local government in the Local Government Ordinance 2001, the matter has been referred to the National Reconstruction Bureau seeking a clarification on this account, the report added.
Under the revised formula, there would be deductions on receipts, along with other compulsory deductions.
Since the towns are independent entities, therefore, no new mega project could be initiated at the cost of divisible pool by the CDGK without getting it approved from the District Consultative Committee. However, the accrued liability on account of such projects (where work is in progress and which were permitted under earlier distribution formula or the liability to be accrued on account of such already initiated projects) would be deducted by the CDGK before distributing the money from the divisible pool according to the new formula.
Subsidy to the KWSB has been proposed to the extent of two per cent of actual receipts.
The government, according to the KWSB Act, can fix any amount up to 10 per cent. However only two per cent has been recommended. Other deductions would be on account of pension contribution for the employees of CDGK and TMA.
Under the previous agreement, the 67 per cent share of defunct DMCs was distributed on the basis of population (70 per cent) and inverse ratio (30 per cent). However, the committee recommended that the share of 48 per cent may be distributed amongst the TMAs in the following manner:
Sixty per cent on the basis of population of each TMA, 20 per cent on the basis of inverse ratio, presently worked out on the basis of subjective point formula for determination of expected income of respective towns and 20 per cent equally divided amongst the TMAs, to compensate the under-developed TMAs.
The proposed formula, expected to be announced in a few days, would be provisional, as after June 30 the resource-sharing would be determined on the basis of actual income receipts of the respective TMAs and other ground realities.
The members of the committee included secretary local government, additional secretary finance, Lt-Col Saif of 5-Corps Headquarters, Munawar Imam District Officer (finance and planning) City Government, Zamir Ahmed Khan, Town Municipal Officer Saddar Town and Muhammad Shamim.—PPI
